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Gold/Mining/Energy : Canadian Small Cap Stocks

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To: the Chief who wrote (483)2/15/2001 10:30:04 AM
From: Gofer   of 512
 
Stake Technology - Nasdaq STKL

Boy this thread is dead. I guess there aren't any good Canadian small caps left ...

In the past 3 or 4 years, I've only found 4 Canadian stocks that fit the following profile:

- small cap
- underfollowed
- good fundamentals
- good growth prospects

These are:

- Direct Focus (formerly Bowflex) Naz DFXI (OK - its not Canadian, but it was on the TSE)
- Wescam - WSC
- Home Capital Group - HCG.B
- Silent Witness - SWE

I don't own any of these currently (market jitters) but will buy back DFXI, WSC, and HCG.B if opportunity presents.

I think i've found a 5th stock that meets the profile.

Stake Technology is in 3 businesses:

- Soy bean products for human consumption. Primarily soy milk. They are the market leaders in the USA.
- Industrial abrasives and recycling
- Steam explosion pulping technology

The first 2 businesses generate good cash flow and increasing profit. The soy beans will be responsible for most growth going forward. I believe the soy market will continue to grow even in a recession. The steam explosion technology is in the business development phase and does not contribute to cash flow but also doesn't consume much cash. It has the potential to contribute a lot of revenue in a few years.

The current share price of $U 1.72 represents a 2000 P/E of about 11 and 2001 P/E of 6.

STAKE TECHNOLOGY ANTICIPATES SALES FOR 2000 OF $102 MILLION WITH RECORD EARNINGS
TARGETS MORE THAN $175 MILLION IN 2001 SALES WITH ACCELERATING EARNINGS GROWTH

staketech.com

All the above is just my opinion (of course). I am long STKL.
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